What Is an Interest Rate?
The interest rate is the cost you pay to borrow money, expressed as a percentage of the loan amount. It does not include fees or other charges.
What Is APR?
APR, or Annual Percentage Rate, includes the interest rate plus certain lender fees. This makes APR a more accurate measure of the true cost of borrowing.
APR vs Interest Rate: Key Differences
- APR includes fees; interest rate usually does not
- APR is better for comparing loan offers
- Interest rate affects your monthly payment directly
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See How APR Affects Your Loan
Use our personal loan calculator to see how different interest rates and APRs affect your monthly payment and total loan cost.
Try the Personal Loan Calculator →Frequently Asked Questions
Is a lower APR always better?
In most cases, yes. A lower APR usually means a lower total loan cost, but loan terms and fees should also be considered.
Does APR affect monthly payments?
Yes. APR influences your monthly payment because it reflects the total cost of borrowing over time.